A CIO's Guide to Investing in a Data Strategy
Data analytics is driving organizations to better understand consumption patterns, customer acquisition and various other factors directly tied to an increase in revenue, reduced expenses, and increased customer loyalty. IT leaders have historically invested in business analytics for the benefit of their peers in other departments, such as human resources and marketing. With spending on business analytics expected to increase by 38 percent in 2015, IT leaders should seize the opportunity to adopt analytics for their own benefit, rather than focusing solely on analytics for other departments.
“The next wave of competitive advantage in IT will come from how CIOs navigate the myriad solutions available to analyze their data, and invest in tools that help, not hinder, the productivity of the IT department”
In today’s digital enterprise, CIOs are often responsible for balancing the demands of new challenges inundating the IT department--such as BYOD risks and shadow IT threats --while also focusing attention on technology that will make the most impact across the business. A successful leader has to undertake the challenging task of prioritizing which trends to focus time and resources on, while also managing the foundational IT systems. Analytics can help in making and justifying these decisions as well as measuring their impact. To create the future of the data-driven IT organization, IT leaders will be well served to focus investments on the following three key areas.
Talent: First and foremost, invest in a qualified team of data experts. According to a recent McKinsey Global Institute report, by 2018 the United States could face a shortage of 1.5 million managers and analysts with the know-how to use big data analysis to make effective decisions. While finding the right people for the job may take time, it does pay off in the long run. Top performing organizations such as Netflix and LinkedIn stand out from the competition with fully developed analytics teams and a culture of using data to drive decisions.
Productivity: IT leaders can focus on investing in analytics solutions that will increase productivity to ultimately free up time and resources for further innovation. Historically, companies that have invested in tools to automate operational applications have obtained significant competitive advantage (think: Henry Ford). The next wave of competitive advantage in IT will come from how CIOs navigate the myriad solutions available to analyze their data, and invest in tools that help, not hinder, the productivity of the IT department. The right data strategy can drastically reduce the time spent on manual Excel reports to just a matter of minutes, for example, which can typically cost staff days of work per month. While this is highly valuable, the significant productivity advantage comes from the insights gained through analytics that offer transparency into an organization’s IT processes, which empowers individuals to implement improvements based on these findings.
Customer Satisfaction: Performance improvements and competitive advantage from a data strategy arise from solutions that empower IT to predict and optimize outcomes. The most effective strategy will not start with the data, but instead will first identify the underlying opportunity and determine a proper solution to address the challenge at hand. By managing the data strategy like a business and keeping customers’ needs, challenges, and overall satisfaction in mind, the IT department will thrive and the company will be more likely to support an increase in IT-related investments in the future.
In building and implementing a data strategy, experiment with several solutions at the same time to see which take hold and provide the most meaningful outcomes. This approach is not only less expensive and time consuming compared to an extensive vendor evaluation process, but it also delivers the best results. The world of the cloud has democratized business analytics, making it easier and more cost-effective than ever before to get started with a cloud vendor.
As a result of an innovative data strategy, one higher education institution can now predict demand on IT resources relative to student enrollment and faculty levels. By integrating human resources data with the academic calendar, staff now have a holistic view into current workload and can predict technology needs for future periods. With an agile mentality focusing on talent, productivity and security, any IT leader (regardless of industry) can achieve an innovative solution to their data woes such as this.
With these three keys to investing in a data strategy, CIOs will transform the IT department from a model of passive reporting to one that actively searches for insight. Manual reporting processes such as Excel are insufficient in a rapidly changing digital business world, and focusing on talent, productivity, and customer satisfaction will ultimately lead to lasting success.